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Unit 1

GM's CEO outlined a strategic plan to position the company as the most valued automotive company. The plan includes leading in products and technology, growing Cadillac as a luxury brand, continuing to grow in China, and delivering core operating efficiencies. GM aims to achieve 10% profit margins by early next decade and return excess cash to shareholders through dividends.

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38 views

Unit 1

GM's CEO outlined a strategic plan to position the company as the most valued automotive company. The plan includes leading in products and technology, growing Cadillac as a luxury brand, continuing to grow in China, and delivering core operating efficiencies. GM aims to achieve 10% profit margins by early next decade and return excess cash to shareholders through dividends.

Uploaded by

div.mittal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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IB Business Management UNIT ONE assessment

IB Business Management: www.BusinessManagementIB.com

SECTION A

Answer all questions from this section.

GENERAL MOTORS (GM)

CEO Mary Barra and her executive leadership


team outlined the company’s customer-focused
strategic plan that aims to position GM to become
the most valued automotive company at a
conference for investors and financial analysts
today. “We have spent a significant amount of
time setting our goals for the future of GM and
developing a specific action plan,” Barra said.
“Our aim is to earn customers for life and create
significant shareholder value in the process.”
GM’s strategic plan includes several major
objectives that the company anticipates will help
it achieve 10-percent profit margins by early next
decade. These objectives include:
 To lead in product and technology: In 2016, about 27 percent of GM’s global sales volume is
expected to come from products new or refreshed within 18 months. That figure is expected to rise
to 38 percent in 2017 and 2018, and reach 47 percent in 2020. During the same time frame, GM
plans to execute the world’s largest automotive deployment of 4G high-speed mobile broadband,
introduce vehicle-to-vehicle connectivity in the 2017 Cadillac CTS and launch a highly automated
driving technology currently called Super Cruise, which allows for extended periods of hands-free
driving on highways. GM has also developed an innovative mixed material body structure that uses
GM-patented technology and a combination of steel and aluminum to deliver designs that are
lightweight and use 20 percent fewer parts.
 Grow Cadillac: GM is establishing its flagship brand as a separate business unit headquartered in
New York City to pursue growth opportunities in the luxury market with more focus and clarity.
Cadillac expects to introduce four new vehicles in North America in 2017, and nine new models in
the next five years in China.
 Continue growing in China: GM’s joint ventures in China are planning to invest $14 billion from 2016
through 2020 to open five new vehicle-manufacturing plants and support sales of just under 5 million
vehicles annually. In the same time frame, GM expects to launch 60 new or refreshed vehicles,
including nine new sport utility vehicles (SUVs).
 Deliver core operating efficiencies: GM’s strategy to improve relationships with suppliers and
acquire other key component suppliers, derive more global volume from fewer vehicle platforms
and lower costs for labour and materials is expected to deliver significantly better variable costs on
upcoming high-volume product launches. By 2020, GM expects that 99 percent of global
production will be on core vehicle platforms.
GM intends to return excess cash flow to shareholders primarily through strong and growing dividends
based on sustained improvements in the public limited company’s underlying financial performance.

Page 2|4
IB Business Management UNIT ONE assessment
IB Business Management: www.BusinessManagementIB.com

QUESTIONS:

a. Define the following terms:


i. Public limited company [2 marks]
ii. Joint venture. [2 marks]

b. Differentiate between internal and external growth. [6 marks]

c. Analyse how GM’s current objectives may affect internal and external stakeholders.
[6 marks]

d. Discuss the relationship between GM’s aims, objectives, strategies and tactics. [9 marks]

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